Fixed-wireless operators eye twofold growth

Fixed-wireless operators eye twofold growth

Leony Aurora, The Jakarta Post, Jakarta

Fixed-wireless service operators are upbeat about their prospects
and estimate that customer numbers could triple by the end of
this year through the aggressive expansion of coverage.

The president and CEO of Fren, a service provided by Mobile-8
Telecom, Hidajat Tjandradjaja, said on Wednesday the company
aimed to sign up one million new subscribers this year to join
its existing 500,000 customers.

"It's a small number compared to that targeted by Telkomsel,
for example," he said, referring to the leading Global System for
Mobile Communications (GSM) operator in the country, which hopes
to attract six million new users this year.

To reach its target, Fren will expand to Bali in the first
semester of 2005 and to Sumatra and Kalimantan in the second
semester, Hidajat said on the sidelines of the launch of Bank
Mandiri's single access line.

He declined to detail the company's planned capital
expenditures for this year.

"One line of fixed-wireless service costs approximately
US$85," he said.

Another industry player, Esia, wants to capitalize on its
limited license in Jakarta, West Java and Banten by entering 14
new cities this year, starting with Bogor at the end of this
month.

"Our target is to attract 500,000 new customers," said deputy
president director Bismarka Kurniawan. That figure is double its
current number of users.

"The capital expenditure will be more than Rp 1 trillion
($107.70 million), which will come from internal funding," he
said.

Fixed-wireless service, which uses Code Division Multiple
Access (CDMA) technology, is a phone service with limited
cellular mobility in a designated area that was first introduced
to Indonesia two years ago.

The service offers rates almost equivalent to the rates of
fixed-line service, which is much cheaper than the rates of GSM
mobile phone operators.

Fixed wireless began gaining ground in the industry last year,
thanks in part to aggressive sales campaigns by operators -- free
calls and free short message service during specific hours and
days, which moved GSM operators to cut their rates and come up
with their own attractive packages.

Operators of the CDMA-based phone service include Telkom's
Flexi service, which dominates the market with 1.5 million
subscribers, PT Bakrie Telecom with its Esia service, Fren, PT
Indosat with StarOne and Mandara Selular Indonesia with Neo_N.

Cellular services, both using CDMA or GSM technology, are seen
as answers to the problem of limited communication access in the
country.

At present, only about 8.5 million people -- less than 4
percent of the population -- have access to fixed-line phones,
while there are about 30 million subscribe to mobile phone
services provided by GSM operators.